Why Disney Wants to Buy 21st Century Fox

Last summer, the Walt Disney Company decided to remove its content from the Netflix platform, in order to deliver its films and TV shows to viewers via its own streaming service. In the face of declining revenues and shrinking audiences, the company judged that regaining control of its lucrative back catalog was the best way to boost its bottom line.

Online streaming: watch what you want, when you want

Customers increasingly prefer to watch movies and TV shows on online platforms, because subscription charges for cable channels have become far more expensive in recent years. The other main advantage of streaming platforms is that customers can watch content whenever they want, on any device.

According to Statista figures, in the United States, the proportion of TV households with a Netflix subscription in 2011 was 28%, while it reached 54% in 2017. In the US, the total number of digital video viewers should surpass 232 million in 2020, which is a good indication of the importance of this means of consumption for future revenue growth.

Online à la carte TV is the future

With its own streaming platform, Disney will be closer to its viewers and will have direct access to their personal data, such as credit card numbers and email addresses, enabling them to provide more targeted advertising and personalized offers.

Recently, Disney announced its largest ever deal: the proposed purchase of movie studio and TV distributor 21st Century Fox for an estimated USD 52.4 billion. Even though the TV business has stagnated over the past few years, it is not going to disappear anytime soon and Disney will now be able to broaden its television offering.

The deal will provide Disney with more content for its online platform, with thousands of movies and well-known TV shows produced by Fox, such as X-Men, Assassin’s Creed, Alien, Planet of the Apes, Deadpool, Avatar, and The Simpsons.

Take advantage of this deal: buy or short-sell Disney or Fox depending on your preferred scenario

Of course, overtaking Netflix and other streaming platforms represents a huge challenge. To use Fox’s content, Disney will first require the approval of the Justice Department. This acquisition will make Disney the first Hollywood studio to enjoy such a dominant position across the filmmaking and sports sectors, giving Disney the power to impose its terms on the entertainment industry.

You can invest in Disney and Fox to take advantage of the effects of the deal on stock prices using stocks brokers worldwide. Trading broker Trade360 is among the most popular and professional trading platforms in the online trading industry, providing an array of advanced tools, charts, and cutting-edge features.